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Riyadh, Dushanbe Eye Joint Investments in Industrial, Mining Sectors

Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
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Riyadh, Dushanbe Eye Joint Investments in Industrial, Mining Sectors

Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)
Tajikistan seeks to strengthen economic relations with Saudi Arabia. Akram Karimi, the ambassador of Tajikistan in Riyadh (AFP)

Coordination is underway between officials in the Saudi Investment Ministry and the State Committee on Investment in Tajikistan for arranging meetings of the Saudi-Tajik joint committee and a business forum during the coming period, a Tajik diplomat revealed.

Moreover, coordination is in full swing to hold the Saudi-Tajik Business Sector Forum in Riyadh in the second half of 2022, with the participation of representatives of the private sectors in the two countries.

“We are preparing to hold the third session in the coming months in Tajikistan, in the presence of Eng. Khalid Al-Falih, the Saudi Minister of Investment and co-chair of the joint committee,” Tajikistan’s Ambassador to Saudi Arabia Akram Karimi told Asharq Al-Awsat.

“We look forward to holding the businessmen forum on the sidelines of the next session of the joint committee to establish partnerships between the private sectors of the two countries,” added Karimi.

According to the diplomat, Saudi Industry and Mineral Resources Minister Bandar Alkhorayef had held a virtual meeting with his Tajikistani counterpart lately to discuss cooperation opportunities in the industry and minerals sectors.

The two ministers agreed to form a joint team and put in place a plan for the future of cooperation.

Karimi predicted that joint investments in the two sectors would be launched soon.

Tajikistan’s Economic Development and Trade Minister Zavqi Zavqizoda had also held a virtual meeting with the Islamic Development Bank Chairman Muhammed Al-Jasser.

In their meeting, the two officials discussed ways of cooperation between the bank and the Saudi Fund for Development in the development of hydropower projects in Tajikistan.

Tajikistan currently has five free economic zones in which there are favorable conditions for the establishment of investment projects and the conclusion of agreements between foreign investors and these zones.

Karimi announced the preparation of an agreement for the encouragement and mutual protection of investments. Sponsored by the Saudi Investment Ministry and the Tajikistani State Committee on Investment, the deal is expected to be signed soon during Al-Falih's visit to Tajikistan.

An agreement to avoid double taxation between the two countries was signed in 2014, along with a package of existing bilateral agreements covering various fields.

“For our part, we believe that it is time to establish the Saudi-Tajik Businessmen Council, especially since there is a memorandum of understanding between the Federation of Saudi Chambers and the Tajik Chamber of Commerce and Industry,” said Karimi, explaining that the MoU verifies the two countries’ desire to establish such a council.

“We are currently working to celebrate the thirtieth anniversary of the establishment of diplomatic relations between Saudi Arabia and Tajikistan,” he added.

Karimi pointed out that the Kingdom is an important development partner for Tajikistan.

He noted that the King Salman Humanitarian Aid and Relief Center has made remarkable efforts in developing social and humanitarian programs in Tajikistan, with a value exceeding $12 million.

Karimi acknowledged that economic, investment and trade cooperation between the Kingdom and Tajikistan is still at the beginning of the road.

The ambassador emphasized that there is a sincere desire on both sides to strengthen relations.

He indicated that the areas nominated for economic cooperation between the two countries in the future are in the sectors of energy, industry, mining, and agriculture.

Saudi Arabia and Tajikistan would also work on raising the balance of bilateral trade.

On the most pressing challenges facing the movement of trade and investments between the two countries, Karimi explained that his country is a landlocked country that does not have any seaports.

The diplomat pointed out that there are feasible attempts by some commercial companies to overcome this logistical challenge.

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Business

China’s Economy Meets Official Growth Target, but Many Feel a Downturn

People shop around at a market in Beijing, Thursday, Jan. 16, 2025. (AP)
People shop around at a market in Beijing, Thursday, Jan. 16, 2025. (AP)
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China’s Economy Meets Official Growth Target, but Many Feel a Downturn

People shop around at a market in Beijing, Thursday, Jan. 16, 2025. (AP)
People shop around at a market in Beijing, Thursday, Jan. 16, 2025. (AP)

China's economy matched the government's ambitions for 5% growth last year, but in a lopsided fashion, with many people complaining of worsening living standards as Beijing struggles to transfer its industrial and export gains to consumers.

The unbalanced growth raises concerns that structural problems may deepen further in 2025, when China plans a similar growth performance by going deeper into debt to counter the impact of an expected US tariff hike, potentially as soon as Monday when Donald Trump is inaugurated as president.

China's December data showed industrial output far outpacing retail sales, and the unemployment rate ticking higher, highlighting the supply-side strength of an economy running a trillion-dollar trade surplus, but also its domestic weakness.

The export-led growth is partly underpinned by factory gate deflation which makes Chinese goods competitive on global markets, but also exposes Beijing to greater conflicts as trade gaps with rival countries widen. Within borders, falling prices have ripped into corporate profits and workers incomes.

Andrew Wang, an executive in a company providing industrial automation services for the booming electrical vehicle sector, said his revenues fell 16% last year, prompting him to cut jobs, which he expects to do again soon.

"The data China released was different from what most people felt," Wang said, comparing this year's outlook with notching up the difficulty level on a treadmill.

"We need to run faster just to stay where we are."

China's National Bureau of Statistics and the State Council Information Office, which handles media queries for the government, did not immediately respond to questions about the doubts over official data.

If the bulk of the extra stimulus Beijing has lined up for this year keeps flowing towards industrial upgrades and infrastructure, rather than households, it could exacerbate overcapacity in factories, weaken consumption, and increase deflationary pressures, analysts say.

"It seems dubious that China precisely hit its growth target for 2024 at a time when the economy continues to face tepid domestic demand, persistent deflationary pressures, and flailing property and equity markets," said Eswar Prasad, trade policy professor at Cornell University and a former China director at the International Monetary Fund.

"Looking ahead, China not only faces significant domestic challenges but also a hostile external environment."

'UNEASE'

Chinese exporters expect higher tariffs to have a much greater impact than during Trump's first term, accelerating a reshoring of production abroad and further shrinking profits, hurting jobs and private sector investment.

A trade war 2.0 would find China in a much more vulnerable position than when Trump first raised tariffs in 2018, as it still grapples with a deep property crisis and huge local government debt, among other imbalances.

So far, Beijing has pledged to prioritize domestic consumption in this year's policies, but has revealed little apart from a recently-expanded trade-in program that subsidizes purchases of cars, appliances and other goods.

China gave civil servants their first big pay bump in a decade, although the higher estimates measure the overall increase at roughly 0.1% of GDP. Financial regulators got steep wage cuts, as have many others in the private sector.

For Jiaqi Zhang, a 25-year-old investment banker in Beijing, 2024 felt like a downturn, having seen her salary trimmed for a second consecutive year, bringing the total reduction to 30%. Eight or nine of her colleagues lost their jobs, she said.

"There is a general feeling of unease in the company," said Zhang, who has cut back on buying clothes and dining out. "I'm ready to leave at any time, just that there's nowhere to go right now."

SCEPTICISM

The world's second-largest economy beat economists' 2024 forecast of 4.9% growth. Its fourth-quarter 5.4% pace was the quickest since early 2023.

"China's economy is showing signs of revival, led by industrial output and exports," said Frederic Neumann, chief Asia economist at HSBC.

But the last-minute bounce in growth may already have been flattered by front-loading of shipments to the US ahead of any new tariffs, which will inevitably lead to a pay-back, he said.

"There will be an even bigger need to apply domestic stimulus" this year, Neumann said.

China and Hong Kong shares rose slightly, but the yuan lingered near 16-month lows, under pressure from sliding Chinese bond yields and the tariff threat.

Subdued markets reflect wavering confidence in China's outlook, analysts said.

Beijing has rarely missed its growth targets. The last time was in 2022 due to the pandemic.

"Are investors around the world going to invest in China because they hit 5%? No," said Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, who expects slower 2025 growth. "So it's becoming an irrelevant target."

Also, long-standing skepticism about the accuracy of official data has shifted into higher gear over the past month.

A bearish commentary by Gao Shanwen, a prominent Chinese economist who spoke of "dispirited youth" and estimated that GDP growth may have been overstated by 10 percentage points between 2021 and 2023, vanished from social media after going viral.

In a Dec. 31 note, Rhodium Group estimated that China's economy only grew 2.4%-2.8% in 2024, pointing to the disconnect between relatively stable official figures throughout the year and the flood of stimulus unleashed from about the mid-way mark.

This included May's blockbuster property market package, the most aggressive monetary policy easing steps since the pandemic in September and a 10 trillion yuan ($1.36 trillion) debt package for local governments in November.

"If China's actual growth is below headline rates, it suggests there is a broader problem of China's domestic demand that is contributing to global trade tensions," Rhodium partner Local Wright told Reuters.

"Overcapacity would be a far less pressing issue if China's economy was actually growing at 5% rates."